Categorized | news, tax avoidance

Offshore tax evaders in line for tough penalties

Offshore tax evaders in line for tough penalties

In his Pre Budget Report last week, the Chancellor outlined further plans to clamp down on individuals who utilise offshore bank accounts in an attempt to bypass the UK tax system.

Following a low take up of HMRC’s New Disclosure Opportunity (NDO), where those sheltering tax in offshore holdings are encouraged to declare these to HMRC, the government is now set to introduce a hefty 200% penalty for non disclosure.

It has been estimated that up to 100,000 people hold assets (such as cash and property) in offshore accounts yet as little as 10 per cent have actually come forward under NDO.

With government coffers at an all time low, most contractor accountants think that it’s no surprise to see further action on offshore tax evasion which, according to government figures, cost them in the region of £45B per year in lost revenue.

The new deadline for NDO is 4th January 2010. Anyone making offshore declarations before this date will be subject to a 10 per cent tax penalty plus interest where applicable. Commenting on the latest campaign, a spokesperson from HMRC said that this would be the last chance for those with offshore accounts to come forward before the prospect of tough tax penalties next year.

Paul Roberts, head of tax investigations at Grant Thornton, said that: “HMRC will stop at nothing to claw back missing tax revenue to UK shores. The severity of HMRC’s pursuit should come as no surprise.”

“Such a draconian penalty relating to tax evasion existed for many years but fell away in the late 1980s. This demonstrates the resolve of HMRC to follow through its threat to punish those who have not taken advantage of both the NDO as well as the earlier Offshore Disclosure Facility.”

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Image: What big eyes you have, Mr… by !borghetti

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